Since its inception, Edmond de Rothschild has been keenly focused on investments that aim to improve the world in different fields. This heritage stems from the Rothschild family’s history, which has been investing in transformational projects for nearly 200 years. While Socially Responsible Investing has been growing in popularity in public markets, this direction of travel has been present for decades in Edmond de Rothschild’s private offering. Meeting the investment objectives and ambitions or our clients in both public and private markets is at the core of Edmond de Rothschild’s investment offering.
Our view is that investors should prioritise investing in companies that take a gradual and sustained approach to ESG criteria. This will lead, over the business cycle, to tangible and concrete changes that genuinely improve society and the environment, rather than companies that jump onto the latest social trends. Reducing needless consumption and waste, knowledge of suppliers and supply chains, as well as engaging with local authorities and partners, are the keys to long-term improvements. It is also important to consider companies in virtually all industries, given the need to effect change in every sector of the economy. By companies investing in these priorities through the cycle, they will be better positioned to weather different economic conditions and periods, such as the ones seen in the past 24 months. This resilience is what we believe drives genuine return outperformance, rather than cosmetic changes.
Investors should prioritise investing in companies that take a gradual and sustained approach to ESG criteria.
There are various areas that companies should focus on. Quick wins include transforming buildings’ energy footprint, looking to localise production and minimise transportation costs, as well as focusing on sourcing sustainable supplies. Successful companies avoid contentious regimes and companies, to minimise reputational and financial damage. Finally, it is important to state that companies’ main focus should be on supplying their customers with quality products at reasonable prices, generating an attractive value proposition. In this way, they will build genuine economic and social capital.
In this regard, Edmond de Rothschild launched a series of megatrend investment themes in the past 18 months. Several of these megatrend investment themes have become especially important in recent months, including local production and next generation agriculture. As a conviction-driven investment house, Edmond de Rothschild continues to seek out and create investment products that provide exposure to themes that aim to provide long-term returns, as well as generate positive social and environmental outcomes.
As mentioned above, in private markets, Edmond de Rothschild has a storied history of transformational change. One of our oldest strategies is focused on the regeneration of brownfield and industrial sites, which are then transformed to create residential and commercial uses, via environmentally advanced buildings. More recently, Edmond de Rothschild has partnered with an investment team focused on agri-tech and novel food production models, targeting investments in groundbreaking companies within this vital sector. Recent events in terms of conflict, prices and environmental changes have shown the importance and relevance of these offerings. Edmond de Rothschild has been at the forefront of these private market initiatives, and will continue to explore opportunities to expand its offering to clients, as well as driving positive change.
Financial regulation is certainly having a growing impact on offerings and investor choices. European regulators are trying to encourage investors and individuals to consider an SRI approach when investing in markets. Time will tell if this is the best approach, given the gradual nature of the required process and the potential for issues with rating systems that can lead to suboptimal results. Edmond de Rothschild is committed to working closely with its client base to offer relevant and attractive solutions for all types of investor profiles and demands. While both public and private market investments can meet client requirements for sustainable investments, private markets can often provide for more focused involvement in this area, due to the direct nature of private investments into smaller companies or projects.
Financial regulation is certainly having a growing impact on offerings and investor choices.
One final area of Edmond de Rothschild’s wide breadth of expertise and history in this domain is the Heritage division of the group. For more than fifty years, the founding family has continued to create and nurture a wide range of products and properties that cleave closely to traditional methods of agriculture and hospitality. These businesses show how the family continues to play a direct role in fostering sustainable businesses, demonstrating the entrepreneurial side of Edmond de Rothschild and its founding family.